The European Commission punished Google in 2017 for unfairly directing visitors to its own shopping service, Google Shopping, to the detriment of competitors.
The European Union's second-highest court has upheld a $2.8-billion (2.4-billion-euro) fine on Google by anti-trust authorities in Brussels for search engine dominance.
Wednesday's decision was considered a major win for the bloc’s competition chief Margrethe Vestager in the first of three court rulings that will strengthen the EU's push to regulate big tech.
The court said the commission correctly found that Google's practices harmed competition on comparison shopping service and swatted away the company's argument that the presence of merchant platforms showed there was strong competition.
"The General Court largely dismisses Google's action against the decision of the Commission finding that Google abused its dominant position by favouring its own comparison shopping service over competing comparison shopping services," the Court said.
The court backed the EU fine, citing the serious nature of the infringement and the fact that "the conduct in question was adopted intentionally, not negligently".
"Google departed from competition on the merits," judges said.
The commission welcomed the ruling, saying it would provide legal clarity for the market.
Google said it would review the judgement and that it has already complied with the commission's order to ensure a level playing field for rivals.
The company can still challenge the ruling at the European Court of Justice (CJEU) but did not say if it would appeal to the bloc's highest court.
Vestager sanctioned the world's most popular internet search engine in 2017 for favouring its own price-comparison shopping service to give it an unfair advantage against smaller European rivals.
The shopping case was the first of a trio of decisions that has seen Google rack up a total of 8.25 billion euros in EU antitrust fines in the last decade.
The company could face yet more defeats in the other two cases involving its Android mobile operating system and AdSense advertising service, where the EU is seen to have stronger arguments.
The court ruling will strengthen Vestager's hand in her investigations into Amazon, Apple and Facebook.